Opportunity-Sensitive Social Welfare

Tim Wienand, Brice Magdalou, Richard Nock and Paul Hufe

No 13034, CESifo Working Paper Series from CESifo

Abstract: We develop a framework to evaluate income distributions from the perspective of an opportunity-egalitarian social planner. Through an original axiomatic route that bridges normative economics and decision theory under ambiguity, we characterize a class of social welfare functions governed by a single parameter capturing the planner's aversion to inequality of opportunity. We obtain a `mean-divergence' representation that separates economic efficiency from a penalty for inequality of opportunity, as well as a stochastic dominance criterion for robust welfare comparisons. We apply these theoretical results to analyze opportunity-sensitive social welfare in the United States across birth cohorts and regions. Mapping standard estimates of intergenerational mobility into our framework, we show that welfare rankings vary substantially with the assumed degree of inequality-of-opportunity aversion. We transparently gauge the extent of this normative ambiguity by providing bounds on the ranking of birth cohorts and regions, respectively.

Keywords: inequality of opportunity; intergenerational mobility; welfarism; utilitarianism; social welfare measurement (search for similar items in EconPapers)
JEL-codes: D31 D63 I31 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_13034

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